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Anettt [7]
3 years ago
14

The risk-free rate of return is 5 percent and the market risk premium is 12 percent. What is the expected rate of return on a st

ock with a beta of 1.4
Business
1 answer:
Kazeer [188]3 years ago
4 0

Answer:

Expected rate of return= 21.8 %

Explanation:

<em>The capital asset pricing model is a risk-based model for estimating the return on a stock.. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. Systematic risks are those which affect all economic actors in the market, they include factors like changes in interest rate, inflation, etc. The magnitude by which a stock is affected by systematic risk is measured by beta. </em>

Under CAPM,

E(r)= Rf + β×(Rm-Rf)

E(r)- expected return- ?

Rf-risk-free rate- 5%

β= Beta - 1.4

(Rm-Rf) - 12

E(r) = 5% + 1.4× (12%)= 21.8 %

Expected rate of return= 21.8 %

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Harvey's Wholesale Company sold supplies of $46,000 to Northeast Company on April 12 of the current year, with terms 1/15, n/60.
victus00 [196]

Answer:

D) Cash 45,540 Accounts receivable 45,540

Explanation:

The journal entry is shown below:

Cash A/c Dr $45,540

        To Accounts receivable A/c  $45,540

(Being cash is received in respect of goods sold)

The computation is shown below:

= Sold value of supplies - the sold value of supplies × discount percentage

= $46,000 - $46,000 × 1%

= $46,000 - $460

= $45,540

Since the net method is used so we debited the cash account and credited the account receivable account.

8 0
3 years ago
The nine-cell attractiveness-strength matrix provides clear, strong logic for Group of answer choices using both industry attrac
aliina [53]

Answer:

using both industry attractiveness and business strength measurements in allocating resources and investment capital to a corporation's different businesses.

Explanation:

A nine-cell matrix can be defined as a strategic framework that provides a systematic approach used multi-business corporations to set priority on their investments among the different business units. Thus, it offers strategic implications of an investment by evaluating business portfolios, which are mainly based on business strength and market attractiveness.

Furthermore, the nine-cell industry attractiveness competitive strength matrix is a strategic framework adopted by individuals or managers in order to assist them in deciding which businesses should have low, average, and high priorities in deploying corporate resources.

Hence, the nine-cell attractiveness-strength matrix provides clear, strong logic for using both industry (market) attractiveness and business strength measurements in allocating corporate resources and investment capital to the different businesses owned by a corporation.

8 0
3 years ago
Phoebe, a sales representative, is so excited during her sales presentation that she does not hear the customer's question corre
Westkost [7]

Answer:

<u>Selective Perception </u>

Explanation:

Selective perception refers to a psychological state wherein, an individual perceives and comprehends only that information he/she finds desirable, thereby ignoring the rest of the information during communication.

So, any of the viewpoints or ideas which appear conflicting to one's own are ignored and discarded under such a psychological state.

In the given case, Phoebe got excited during her presentation that she missed out upon hearing customer's questions. In such a state of excitement, her mind only perceived what she desired, thereby ignoring anything which appeared undesirable.

So post providing inappropriate answers, she went on with her presentation , i.e she got carried away in excitement. Such psychological state indicates the operation of selective perception.

6 0
3 years ago
The aggregate demand curve shows a ________ relationship between ________ and aggregate output ________.
dezoksy [38]
Why should i ever care just kidding 
6 0
3 years ago
dentify a true statement about sales-oriented firms. a. They target their products to specific groups of people. b. They recogni
stellarik [79]

Answer:

Correct answer is (d). They target their products at "everybody" or the "average customer."

Explanation:

Every sales-oriented firms want more customers and want to make more profit by selling to as many customers as possible, this makes them to seek and target their products to every potential buyers and other average customers available.

6 0
3 years ago
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